EU Dropped the Ball on Airline Favoritism Claim

(CN) – The European Commission failed to properly investigate claims that the Italian government favored Italian airlines over foreign carriers through economic support and regulation, in violation of EU law.

The European General Court’s ruling came in response to claims by Dublin-based airline Ryanair that the Commission had failed to investigate reports submitted in 2005 regarding the Italian government’s favoritism towards Alitalia and Volare, airlines based in the country. According to Ryanair, the Italian government allowed native airlines to dodge airport fees, offered fuel rebates, and placed restrictions on non-Italian airlines at regional airports. A ¬ 35 million ($47.2 million) compensation package for losses caused by the September 11 terrorist attacks also violated EU competition law, the company claimed. Additionally, carrier Alitalia received special treatment in the form of public financing and not being required to repay debts to the government. Ryanair sent six letters to the Commission from November 2005 to August 2007, repeatedly asking for review of the policies. The Commission responded only to the claims involving Volare, however, prompting Ryanair’s appeal to the General Court.Though some of Ryanair’s claims were blocked on procedural grounds, the court ruled that the failure of the Commission to define its position on violated its obligations. The ruling appeared largely symbolic, however, since no action was ordered of the Commission and both parties were ordered to carry their own costs.